Quote:
Originally Posted by IllTestYourGirls
Yeah was about to edit the debtor thing.
The 20% interest rate is using history as an indicator. 20% is actually on the low side of some economists projections. The fed will have to start reeling in the dollars at some point or hyper inflation will happen. You can not inject this much money into the system without a plan to reel it in.
If creditors are selling, they are not lending, where does that leave us? Printing more? Taxing more? Cutting more?
Im way to tired to be explaining this been working hard making money  |
Yet in the face of all that you are saying, the market for 30 year treasury debt is almost at record low yields. That means that the market place which consists of every buyer of our debt is not yet scared to lend money at very low rates for extended periods of time.
It's true that if there is a sustained, strong recovery (which is no sure thing in the near future) the FED will have to mop up the liquidity.
It's also true that retired loans and defaults contract the money supply (ie; destroy money).
You are looking at one side of the situation and are not differentiating between the short end and long end of the yield curve. The market sets the rates out the yield curve, not the FED. 20% rates in the late 70's / early 80's was fed funds, etc.
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